Legal Commentary

The Supreme Court has just handed down its decision in 14 Penn Plaza LLC v. Pyett.  In a 5-4 decision, lined up according to the traditional liberal/conservative split, the Court held that a union-negotiated collective bargaining agreement (CBA) can force individual employees to arbitrate their ADEA claims against the employer.  The CBA in 14 Penn Plaza was negotiated between Local 32BJ of the SEIU and NYC's Realty Advisory Board (RAB) -- a massive CBA covering thousands of workers.  The Court held: "The NLRA provided the Union and the RAB with statutory authority to collectively bargain for arbitration of workplace discrimination claims, and Congress did not terminate that authority with respect to federal age-discrimination claims in the ADEA."

A few notes:

• The majority appears not to have overruled the holding in Gardner-Denver, but it admits it has overruled much of the "broad dicta" in the case that was "highly critical of the use of arbitration for the vindication of statutory antidiscrimination rights."  However, it claims that Gilmer, rather than the present case, did the overruling.
• Justice Stevens and Justice Souter both dissent, focusing on the majority's abrupt rejection of prior precedent.  Both point to the fact that Congress chose not to overturn Gardner-Denver in the last 35 years, so this ruling is (in their view) contrary to Congressional intent.
• The majority does leave a potentially huge hole in its holding, because it does not address the concern that a union may choose not to pursue an individual employee's claim through arbitration.  The majority states: "[A]lthough a substantive waiver of federally protected civil rights will not be upheld, we are not positioned to resolve in the first instance whether the CBA allows the Union to prevent respondents from 'effectively vindicating' their 'federal statutory rights in an arbitral forum'" (quoting Green Tree).  Justice Souter's dissent notes: "On one level, the majority's opinion may have little effect, for it explicitly reserves the question whether a CBA's waiver of a judicial forum is enforceable when the union controls access to and presentation of employees' claims in arbitration, which is usually the case."
• What will unions and employers do with this new-found power?  In its amicus brief, SEIU claimed that the CBA did not cover the workers' claims, since both the union and the employer did not think the claims had merit, and under the CBA only disputes between the union and the employer were arbitrable.  The Court seemed to ignore this argument as not presented below.  I would guess that 14 Penn Plaza would be a double-edged sword for most unions.  Neverthless, the politics are interesting: a holding that provides more power to unions gets the five conservative justices to overrule fairly venerable precedent.